Christian Kerr is a senior reporter with The Australian newspaper
and a former adviser to two Australian Liberal federal cabinet ministers
and a state premier. Follow him on Twitter.

At the moment there is only one certainty in Australian politics – that an election will be held on September 7. Just six weeks ago, things were very different indeed. Julia Gillard, the Prime Minister, and her minority Labor government were doomed, with polling putting support for the party at its lowest point in 80 years, and Liberal leader Tony Abbott was guaranteed to be our next premier. The only question unresolved was the size of his majority.

Then Kevin Rudd returned as our Prime Minister. Rudd is Prime Minister for two reasons; his bastardry and mastery of breakfast television. Just as his skills set is unusual, Rudd himself is an unusual choice for a leader of a political party: a nerdy, moon-faced, Mandarin-speaking former diplomat turned senior bureaucrat.

His diplomatic career never progressed that far. His time in the bureaucracy was more successful. He rose to become director-general of the office of cabinet under a Labor government in his home state of Queensland. But his nickname from the time, “Dr Death”, speaks volumes about how he was regarded.

In a
claustrophobic courtroom in the city of Kirov, ironically named after a popular
and prominent Bolshevik who fell victim to a jealous Stalin in 1934, a
controversial but not entirely unexpected sentence was passed down upon Alexei
Navalny, an equally popular and prominent political activist who appears to
have fallen victim to a jealous Putin in 2013.

The
name of this tall, articulate activist has been on
everyone’s lips of late, having gained widespread attention for his determined
questioning of big business and his canny use of social media. His prosecution
has catapulted him onto an even greater stage whilst subsequent reports have
placed him on the pedestal reserved for great men of history. But as is so
often the case, the frenzy of people clamouring to denounce the system neglect
vital details and considerations in their desperation to indoctrinate the
masses.

Moral judgement

We
have a bad habit of trying to simplistically divide the world into black and white
issues, excluding shades of grey. After 9/11 George Bush instructed the Earth’s
population that they needed to decide if they were “with us or with the
terrorists”. Throughout the seemingly never-ending ‘Arab Spring’ we impulsively
assume that rebels are democrats by virtue of them opposing a government that
happens to be non-democratic. And in Russia, we talk of those who oppose Putin
as anti-corruption campaigners or fighters for justice, without consideration
for how corrupt or unjust those same people may also be.

The
verdict sentencing Alexei Navalny to five years imprisonment was unquestionably
ludicrous, the evidence upon which it was based almost certainly fabricated,
and the decision without doubt politically motivated. But this doesn’t make the
accused a virtuous knight in shining armour, in the way he is being portrayed
currently.

One
might debate whether a leopard can change its spots but Navalny was stalking in
the wild Russian political tundra long before he became obsessed with the fight
against corruption for which he has won many admirers.

A controversial past

Navalny
may believe in protest now, but in 2007 when a group of hecklers protested
during a meeting he was speaking at, he offered them outside and shot one of
them with a 'traumatic pistol'. He later defended his actions by arguing that
he fired the shot from a reasonable distance and didn't aim for the demonstrator’s
head.

He
also had a dalliance with the extreme right, creating a group called ‘Narod’ resembling
the concept of the German ‘Volk’ and over several years spoke at and took part
in the Far-Right’s annual Russian March alongside skin heads,
ultra-nationalists and holocaust deniers. In quasi-political videos he warned
of the Islamification of Russia, portraying those from the Caucasus as flies
and roaches that need swatting and comparing illegal immigrants to bloodied
teeth that required painfully brutal extraction. Even his fellow activist Maria
Gaidar referred to his actions as ‘fascism’.

One
Human Rights leader banned Navalny from attending conferences, whilst his
antics got him expelled from the liberal party Yabloko, one of the few serious
legitimate organisations that might have stood a chance of challenging the
status quo if they could have harnessed him. But just like many turbulently
charismatic politicians throughout history, all others were mistaken in
thinking they could control and use his skills for their own ends. Putin may
well also find this to his cost.

As
usual our own media only tells readers half the story. Referring to him simply
as an “anti-corruption blogger” the BBC’s profile of his ‘rise to prominence’
begins in 2008, conveniently omitting his suspect previous activities, whilst The Telegraph begins its account in 2011
when he is already heading up mass protest movements. Some publications have even
referred to his imprisonment as “Russia’s Mandela Moment” which does a huge
disservice to the former South African President.

In
his excellent latest book, journalist Ben Judah describes Navalny as a
“rabble-rouser” and a showman with a quick temper. He astutely compares Navalny
to Putin himself, pointing out how over time the oppositionist has picked up
and run with several of the President’s core themes such as the ‘liquidation’
of oligarchs and heavy-handed policies in the Caucasus. Putin’s clamp down on
adversaries has also led to a political vacuum which such a man can fill by
replicating the popular side of early Putin and adding a double dose of
handsome charm. In many ways Navalny has out-Putined Putin.

Reputation and reality

Indeed
Navalny is nothing if not an opportunist. He has an enduring lust for power and
prominence which has seen him turn his sails whenever the wind changed over the
last decade. Those wondering why he looked so unmoved, even smug, when
listening to his sentence should look no further than the resulting crowds on
the streets chanting his name and the endless use of the #Navalny hash-tag on
the social media site he is so addicted to. He knows that with the perceived
dark figure of Lord Vader-Putin striking him down, he becomes more powerful
than the President could ever imagine.

As
with much else in recent years, it appears that Navalny has shrewdly recognised
the prevailing mood and ridden with it whilst Putin’s government has made what
could turn out to be a colossal misjudgement. Of the President’s own creation,
the recent political climate has woven together disparate organic pieces into
an increasingly united body and with his verdict, the prosecutor delivered the
lightning bolt capable of animating a monster.

Even
if an objective observer was not morally or ethically opposed to the judgement
he should be pragmatically opposed simply on the grounds that it foolishly
gives momentum to the very problem it is intended to prevent. Aside from adding
one of the most astute, charismatic and dangerous politicians in the country to
the growing list of symbolic martyrs that help to incite an already
disenchanted and active segment of society, it increases the dismay that many
Western observers feel when they look upon Russia from afar. I have said before
that Russia is like a teenage son, you may love it for a variety of reasons,
but its foolish and reckless behaviour often disappoints you. Russophiles
throughout the World, myself included, tear their hair out when confronted with
such a turn of events.

Within
hours of the verdict, the Russian stock market dropped by several percent,
losing around £200m from its exchange, with companies like VTB and Sberbank
losing up to 2.5% off the value. For a country looking to promote its economic
importance as a way of excusing its other problems, this is unforgiveable. Mikhail
Prokhorov quite rightly questioned why young businesspeople and professionals
such as lawyers would want to remain in a country where their endeavours are
put at risk.

Economic impact

Russia
needs external skills and investment, whilst it also seeks to partner with
Western businesses. But those potential providers, investors and partners are
understandably nervous about involving themselves with Russia in such
circumstances. Money and morality are rarely comfortable bedfellows and whilst
the occasional ‘activist’ is thrown in jail it is easy for ruthless businessmen
to look the other way, but they are much less likely to do so when each
slamming of the prison door also has an economic impact. If Russia wants businesses
to risk their capital within its borders rather than in other emerging markets,
it needs to provide stability and reliability not petulance and vindictiveness.

Whichever
stance you approach this judgement from, it is difficult to contemplate the
nonsensical decision making or to project a result anything other than a
victory for Putin’s critics.

Mark
Twain once said that “martyrdom covers a multitude of sins” and it is evident
that with this verdict the Kremlin has assisted Navalny in his rebirth from
sinner to saint. There are many who want Putin overthrown, but those talking of
Navalny as a messianic alternative should be careful what they wish for.

Kevin Rudd has dramatically returned to the Australian Labor Party leadership following a 57-45 caucus ballot against Julia Gillard on Wednesday evening in Canberra.

Rudd was sworn in the following day by the Governor General, Quentin Bryce, making then Leader of the House Anthony Albanese his Deputy Prime Minister. Senator Penny Wong emerged as Labor Leader in the Senate. Gillard will retire from politics at the next election.

Rudd’s relentless pursuit to return to the leadership seemingly hung on the balance of Cabinet member union powerbroker Bill Shorten. Shorten - himself a touted future leader - appeared before the media minutes before the party room vote to announce he was switching his support from Gillard to Rudd, effectively sealing the outgoing PM’s dramatic fate. Shorten was instrumental in making Gillard Prime Minister in the first place and having now wielded the knife a second time may have badly damaged his future leadership prospects, in the process.

The result also led to the resignation of senior Ministers from Cabinet including Deputy Prime Minister and Treasurer Wayne Swan. Gillard is set to resign from Parliament altogether following her calls for the ballot loser to resign as an MP at the next election, with other Cabinet colleagues following suit.

With rumours of an early election before the14 September date set be Gillard, Labor has set its sight on a campaign aimed at salvaging seats in Kevin Rudd’s own State of Queensland and Western Sydney, whilst creating a narrative that the Opposition’s plans for public spending will result in austere times – all in an effort to stem the losses predicted by recent opinion polls.

The move will no doubt be seen as the party’s best chance of survival in campaign against Opposition Leader Tony Abbott’s looming victory at the upcoming election. With Gillard’s performance pointing towards to a primary vote for Labor of just 30 per cent and Abbott far outstripping her in the preferred PM stakes, recent polls have shown voters feel that Labor’s prospects will improve vastly under Rudd’s leadership; though a large proportion of voters did not like the idea of a change when put to them.

Big questions now loom for Rudd on Labor’s policy priorities he will take to the next election, as well as the focus on key seats. With less than 100 days he has little time to re-cast and resolve many of the internal battles on policy direction and attempt to wedge the opposition as he returns to the Prime Ministership. Key issues include the bemoaned carbon tax, border control, education reforms with State Governments and ultimately the budget and public spending.

For the opposition, their campaign to remind voters of Kevin Rudd’s tumultuous terms as PM begins through a series of ad campaigns, highlighting current and former ministers advocating their staunch views against his premiership. Rudd won’t be able to escape the reasons why his first attempt at PM was a failure.

Julia Gillard’s three year tenure at Prime Minister has been dramatically ended at the hands of the vengeful Rudd and the key backing of the Unions in an attempt to salvage a victory or minimise the losses at the next election. The big question looming for Rudd and Labor for the next election is; is it all too little, too late?

Huzzah!
Cyprus has been saved! Eurozone finance ministers announced last night
that they had agreed on a €10 billion bailout deal for the stricken island. The
main feature of the package is the death of a bank: Laiki, the country’s
second-biggest bank, will be divided into “good” and “bad” parts, with the
former eventually being merged into the larger Bank of Cyprus. Deposits under €100,000
will be guaranteed. But any uninsured deposits over that sum will be hit to the
collective sum of €4.2
billion. This is being reported as a strike on mega-rich Russians with Cypriot
bank accounts, but is that wholly true? I’d like to hear more about the
affected parties before reaching conclusions.

In
any case, this is, to some extent, positive news for everyday savers in Cyprus.
Their money has been spared – and so has the Bank of Cyprus, the survival of
which was not always certain. And it’s good news, too, for the Eurocrats, for
three main reasons. First, as most of the pain is being suffered by individuals,
it’s a deal that’s likely to be politically acceptable in countries such as
Germany. Second, for a similar reason, there is unlikely to be market panic
across Europe about the idea of further expensive bailouts. And third, all this
has been achieved without taking Cyprus out of the currency union, which –
although it may
not have had much effect by itself – could have raised the prospect of
wider break-up. The euro staggers on.

But is it all a good news story? Hmm, perhaps not. As Pawel Morski explained in an excellent post on Saturday:

“There are four shocks happening at once; the bog-standard austerity
shock; the trauma of bank withdrawal controls; the wealth shock; and the
structural shock of wiping out the financial sector. The bailout bill is
certainly going to get a lot higher too, as a larger amount of debt is piled
onto a smaller economy.”

All of which means that Cyprus and its people face years of
financial grief. It reminds me of what a US major is supposed to have said
about Ben Tre during the Vietnam
War: “It became necessary to destroy the town to save it” – except, from the
perspective of Brussels, Cyprus may not even have been saved. There’s still the
possibility that the country will voluntarily leave the Eurozone in order to do
what Daniel Hannan recommends:
devalue its way to growth.

Here's a good analysis of the challenge facing the US Republicans (and British Conservatives for that matter)...

"Why hasn’t the Republican Party been able to construct a program of its own, in which the American people can have confidence? I would suggest two reasons. First, the party has never fully reconciled itself to the welfare state, and therefore has never given comprehensive thought to the question of what a conservative welfare state would look like. Second, because of their close historic association with the business community, Republican leaders tend to think like businessmen rather than like statesmen, and therefore bumble their way through their terms in office."

Does the age of the piece mean that Republicans/ Tories should ignore its recommendations or recognise their persistence?

For Arthur C Brooks, President of the American Enterprise Institute, and former Governor Jeb Bush the answer is "recognise their persistence". In two separate OpEds for the Wall Street Journal both men call the Republicans and conservatives to a moral mission.

In fourth place with about 10% of the vote was the current prime minister - the free market, fiscally responsible (ie pro-austerity) Mario Monti.

In third place, winning about a quarter of the vote, is the completely insurgent Five Star party of the foul-mouthed stand up comic Beppe Grillo. He cannot stand for parliament himself because of a manslaugher conviction dating from 1981.

In second place with about 29.2% of the vote is Silvio Berlusconi's centre right coalition. Sex scandals, dodgy business deals and a record of policy failure in government haven't prevented Mr Berlusconi from winning three times as many votes as the markets' favourite candidate, Mr Monti.

And in first place, by the narrowest of margins, is a centre left bloc. Pier Luigi Bersani's left-leaning parties won 29.5%.

If Moody's downgraded Britain they and international markets are going to love this.

I'm grateful to the Foreign Office for their note with these quotes, which I have cheerfully plundered.

Germany

Angela Merkel, Chancellor: "Germany, and I personally, want Britain to be an important part and an active member of the European Union... We are prepared to talk about British wishes…and we must find a fair compromise. We will talk intensively with Britain about its individual ideas but that has some time over the months ahead."

Die Welt: "Our Continent needs a rethink. Germany finds different answers than France, but France should also seek and find new answers for itself instead of resting on its Grande Nation laurels. What does the EU want to be? Will it continue to grow ever larger – or grow up and learn not to tar all nations with the same brush? In view of the excessive bureaucracy, unscrupulous debt-making, lack of transparency and democracy, it is not “more Europe” that we need but a Europe with well-defined contours... Britain’s scepticism, its non-conformism and its liberalism were always the engine for Europe. Nothing is final. What is needed today is a German-British axis. It is now a question of Europe’s future, not its past."

France

Pierre Moscovici, France's Finance Minister: "It’s for the British people to decide what
they think… Britain is a distinctive member of the European Union…who
asked for a rebate, which still exists, and who isn’t part of Sechengen,
but at the same time is extremely useful on common foreign and security
policy. ...The European spirit is also about respecting diversity.
Europe is united in its diversity.…like the President of the Republic, I
support both a united Europe but also a “differentiated” one, which
means some members can go faster than others.

The Netherlands

Frans Timmermans, Foreign Minister: "The EU must be
reformed. The Netherlands and the UK are in agreement on that point. To
overcome the crisis and achieve sustainable growth, the flaws in the
euro must be mended, the internal market must be enhanced and free-trade
agreements must be concluded with the US and Asian countries. The
member states need to institute the necessary reforms, and Brussels will
have to tighten its belt and work more efficiently. The UK and the
Netherlands are allied on almost all these issues. This is why we want
to keep the British on board in the EU."

Mark
Verheijen, spokesman on Europe for the governing Liberal party. “We want a Europe that
remains limited to its core tasks. He [Cameron] is framing the debate sharply,” he
said.

Ireland

Lucinda Creighton, Minister for European Affairs said after the speech that there were "no surprises" in the PM's speech. Creighton said that it was now up to the British people to decide on their future relationship with the EU. She noted that the speech's reference to strengthening the single market and the need to be competitive were principles that "we all agree with". She said she hoped an in-out referendum in Britain would lead to a "more balanced and reasonable debate", adding "Our experience of referendums has been very positive, in that they really engaged people in the issues".

Eamon Gilmore (Tanaiste) said yesterday evening that it “would be better for us all” were the UK to remain in the EU. He went on to say that “We’re very close neighbours. We are now very good friends. We share a shared responsibility for the peace process in Northern Ireland and I have said publicly and I repeat here: Ireland wants to see the United Kingdom as a fully engaged committed member of the EU.”

Denmark

Pia Olsen Dyhr, Minister for Trade and Investment: “I’ve listened with interest to Cameron’s speech this morning. The UK
is a great market for Danish business and the UK is a good ally on the
issue of free trade – not least trade agreement with 3rd countries.
Therefore it is important to continue to keep the UK close to the EU”.

Czech lands

Petr Necas, Prime Minister: "The scepticism of the British public is understandable... British voters’ feelings of remoteness from EU elites in Brussels are right... EU competitiveness is a Czech priority as well. The Czech Republic has no interest in the UK leaving the EU and it wants to see the UK as a part of the EU’s future."

Enikő Győri, Europe Minister: More and more European citizens are sceptical about the EU truly representing the interests of the people “and they often feel that the decisions are made too far away from them and over their heads”, therefore the Union has to regain their trust.

European Commission statement: "This is an important contribution to the democratic debate on Europe in the United Kingdom. It is for the British Government and people to set out what they feel is the best approach to the UK's place within the European Union. The Commission welcomes the Prime Minister's unequivocal statement that he wants Britain to remain in the European Union. The EU is a Union based on the democratic will of its Member States. The Commission has been consistent in stating that, provided Britain wants to remain in the European Union, it is very much in the European interest - and in the UK's own interest - for Britain to be an active member at the centre of the European Union. The UK brings a great deal to European integration and has positively shaped European policies from the deepening of the single market, to enlargement, to climate and energy policy, to keeping Europe open to the world and developing new trade opportunities. Following the speech, the internal debate will hopefully focus on the substance of the current relationship and will allow for a well-informed assessment of how working through Europe impacts on the UK's influence on global challenges."

The American Commentary magazine has just published a collection of answers to the question, "What Is the Future of Conservatism in the Wake of the 2012 Election?"

The answers focus on American conservatism but they're not irrelevant to our future, here in Britain. I've observed a number of big themes from reading the symposium and have summarised them below. You can purchase the whole collection for $4.95, here.

I will begin by noting that not all of the contributors to the symposium were negative about the health of conservatism or even convinced that conservatism needed to change very much at all. Roger Kimball was notably unwilling to be dragged into despondency by the presidential election result. Voters, he argued, will turn again to Republicans and to conservatives when it is clear that Obama, liberals and the Democrats had failed. And they will fail, he insisted. Quoting the economist Herbert Stein's dictum that "that which cannot go on forever, won't" Kimball declared that reality augured well for conservatives because "reality is conservative". Margaret Thatcher would agree. "The facts of life," she said, " are conservative".

Reinforcing the Kimball/Thatcher analysis numerous contributors pointed to Democrat-dominated states that were in advanced stages of the liberal statist experiment and were increasingly dysfunctional. "Democratic strongholds such as California, Illinois, and New York are doing everything that they can," writes Paul A Rahe, "to show us the future as they envisage it and to demonstrate that it does not work." Republicans had to contrast these states with the plurality of states that they still governed and which - like Texas - were outperforming the US average. Artur Davis worried about this wait-for-the-other-guys-to-mess-up tactic, however. "While conservatism has endured," this ex-Democrat noted, "it’s worth pointing out that in my lifetime, voters have tended to turn Right primarily in reaction to liberal failure or disarray – the freefall of the 1960s, the ineptitude of Jimmy Carter, the excesses of Democratic Congresses in 1994 and 2010." In this Davis is largely right. Conservatives win 'rescue' elections - we win when the other side has failed and a 'clean up job' is necessary. That Romney didn't win last year was doubly worrying, therefore. We don't normally win in good times - such as the 1990s and noughties. Voters prefer Left-leaning parties in those times. We need to work harder at defining a positive image for ourselves if we are to be serious contenders at all elections.

The CDU had been expected to lose control of Lower Saxony for some time and, yesterday, by the narrowest of margins it did lose control of this North West German laender. It turned out to be a much closer contest than expected, however.

The low CDU expectations in these regional elections had been rooted in fears that the CDU's FDP partners were unlikely to cross the minimum 5% threshold and the SPD opposition had been performing competitively in opinion polls. Two things then changed. The popular CDU candidate in Lower Saxony - the half-Scottish David McAllister (read about him here) - urged some of his supporters to lend their votes to his FDP junior coalition partners. This political blood transfusion seemed to work and up to 100,000 Christian Democrat voters ended up tactically in the Free Democrat column - ensuring it more than passed the 5% threshold. The other factor that made the election surprisingly competitive were repeated gaffes from the recently confirmed German-wide leader of the SPD, Peer Steinbrueck. He has made repeated gaffes since becoming his party's candidate for Chancellor - including a foot-in-mouth suggestion that he'd like a bigger salary if he was elected to Germany's top job.

For the first time in a decade Lower Saxony is now expected to be governed by an SPD-Green coalition with 69 seats to the outgoing CDU-FDP coalition's 68 seats.

Chris Gatenby has previously worked for Policy Exchange and is a Conservative Party activist. He is currently Vice President of Australian Liberals Abroad UK and writes in a personal capacity. Isaac Levido is an Australian who has recently moved to London from Washington DC, where he worked with Republican Senate campaigns before advising on Congressional and electoral politics at the Australian Embassy.

The passing of 2012 ushers in the most welcome of junctures for long-suffering Australian conservatives: a federal election year. Prime Minister Julia Gillard’s minority Labor Government has been in an election losing position since early 2011 and, according to the Newspoll published by The Australian, ended 2012 in the same place they started it. They face an intimidating eight point (54%-46%) two-party preferred deficit to the Liberal/National Opposition led by Tony Abbott. If this outcome were translated into votes Abbott would be elected Prime Minister in a landslide.

Speculation abounds about election timing but in all likelihood it will be held sometime between August and October. While a poll could technically be called by Gillard any day, the earliest possible date for a joint House and half-Senate election (the normal format) is 3 August, the latest being by 30 November. A good summary of the mechanics of the whole thing is available here.

We suspect both sides of politics, not least the Australian public, will be glad to leave 2012 behind them. It was a year dominated by a series of distracting scandals and acrimonious personal attacks. In a word: forgettable.